While welcoming the construction industry's package announced by the Prime Minister, Pakistan Association of Large Steel Producers (PALSP) has stated that genuine concerns of the steel industry also need to be deliberated in order to bolster the construction industry.
"There can be no construction without steel which is missing from the package. The focus needs to be aimed at enabling the steel sector to support construction and employment," said PALSP in a statement issued after the announcement of package.
The steel industry is of the view that since the Pakistani industry was already witnessing a major downturn, the current lockdown has created a situation where steel companies are defaulting and close to bankruptcy.
The PALSP has provided a clear roadmap to the government to pull the industry out of the crisis. Some of the submissions of steel industry are as follows ;(i) allow steel industry that is providing material to the construction sector to open across the country including downstream retailers/traders. If steel mills and shops are not open how can constructions' sites operate? ;(ii) SBP to provide one-time interest free loans to steel manufacturing entities for a period of 6 months to help create liquidity in the sector.
There is no recovery of trade receivables and taking on additional debt, at high interest rates, in a sector that is struggling is not a viable option;(iii) turnover tax should be reduced to 0% from 1.5% for manufacturers and downstream retailers/traders.
This will ensure documentation and will provide some cash flow relief to an industry that is already making losses this year.
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